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by nchuhoai
5048 days ago
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Saying the deal was bad for instagram and attributing it to careless decisions by young founders is like saying you should have known how the FB stock is going to develop. Duh, you always take risk if part of your deal is in stocks, you dont have to be a professional to know that. Heck, people, including seasoned investors have predicted on average 54 for the stock, so why wouldnt you have taken stock? Always awesome to see people play Captain Hindsight:
http://www.youtube.com/watch?v=cqkI691dxNg |
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The writer for the story is "A former corporate attorney at Shearman & Sterling, he is a professor at the Michael E. Moritz College of Law at The Ohio State University."
As such he is looking at what structures could be possible instead of what happens actually in negotiation because you have to get agreement on both sides. While of course he could be correct, (we don't know the exact details so we can't rule that out) there is the possibility that those wouldn't have been terms agreed upon even if proposed.
The title of the story was "How Instagram Could Have Cut a Better Deal". Well they also could have cut a better deal by getting twice the amount they got even with the same terms or all in cash, right?
It's ironic as well since to most outside observers Instagram did quite well.